The foundation of a strong supplier relationship is a great onboarding process. It’s an essential part of any supply chain manager’s job role and one that really should “start as you mean to go on!”
Unfortunately, the process isn’t quite as straightforward, simple or as speedy as you’d hope. The two main pitfalls are:
- Process management – by various people, teams and locations across multiple locations.
- Lack of centralised data – leading to siloed information across multiple systems
The outcomes and impact from this practice can range from frustrating and time-consuming to devastating for business growth.
Some of these impacts are:
Poor process management delays supplier onboarding, which can have a catastrophic effect on project deadlines
Cost in terms of employee time, but also factors such as delayed project delivery hitting cash flow or profitability. Inefficient supplier onboarding can also lead to rises in purchasing costs in raw materials in particularly volatile markets.
Risk & Compliance
Without a detailed, consistent and comprehensive supplier onboarding process, it’s difficult to manage and mitigate risk and ensure compliance in the organisation. Either by moving too quickly with incomplete data or not capturing all factors that are required to make confident evidence-based decisions, risk can be massively affected by onboarding and compliance checks missed.
Linked to many commercial outcomes, the lack of a singular source of data can mean decisions being made with suppliers that are not as informed. Not only risk as mentioned above, but data quality can affect sourcing decisions directly and other fit-for-purpose judgements like insurance, certifications and accreditations.
Getting off to a good start is important, and a singular, streamlined onboarding process can help your suppliers form stronger bonds with your company. A simple example is that they’re not being asked to duplicate work on providing information due to your internal inefficiency, which helps build trust and fosters a collaborative culture.
Making it work…
So how do you remove friction and streamline supplier onboarding?
Here are our best practices based on over 10 years of helping ambitious supply chain leaders achieve their goals.
Master Your Data
As we’ve discussed above, one of the main pitfalls is the lack of consistency of supplier data within organisations. This could be across individuals, departments or divisions, but whatever the cause, the effect is the same – inefficiencies creep into the process and crucial mistakes can be made.
Perhaps we’re biased, but a dedicated system designed to manage your supplier master data (like SourceDogg) can do this for you – rather than trying to adapt an overly complex ERP system to do it when it’s much better as an operations or accounts package. This master data can then be used across the organisation to identify where you have sufficient depth or breadth of suppliers or analyse the gaps in your supply chain for strategic planning.
Develop a Self-Service Superpower
Implementing self-service portals for suppliers is a must as it alleviates the administrative burden from your team either creating onboarding forms from scratch, amending and/or copy/pasting into a variety of different platforms. It reduces manual workload and unlocks the power of your people to do their job, not the busywork.
Become Adaptable & Dynamic
Using a dedicated supplier management platform with dynamic and adaptable onboarding forms will cut down on internal time spent and cost through minimising duplication, but it also speeds the process up for suppliers too. Onboarding requirements are not equal for all suppliers across all categories and levels of strategic integration. Our platform allows you to customise the onboarding experience dynamically to collect the relevant information you need for each supplier based on simple to use templates that hide unnecessary fields and reduce complexity.
Adopt Automation, Approvals & Workflows
Minor suppliers for unimportant goods don’t need CEO-level approval, so onboarding is made much easier by the ability to configure workflows to implement checks and approvals at logical stages in the process.
Your process should automate emails and provide visibility of the stages of the process too – so no more waiting on a senior manager who is on holiday, or a supply chain manager with an overloaded inbox. This also applies externally, it’s essential to reduce the back-and-forth emails between suppliers and your team.
Augment & Enhance
Great business decisions aren’t binary or simple, they’re nuanced and multi-factorial. When onboarding suppliers, it’s important to capture all the first-party data through forms as discussed above but to also blend data from third parties too. Whether it’s credit scores, professional certifications or previous performance data, the process of augmenting supplier profiles with added information gives you a rich mine of data to manage risk and compliance at the source.
We’re here to help…
Making the supplier onboarding process frictionless isn’t an easy task, but deploying the right technology solution to help you along the way is essential to achieving these five best practices. It’s essential to implement a system that is easy to set up and use and is therefore adopted readily by the frustrated members of the supply chain team.
We’d love to show you how SourceDogg can help you onboard your suppliers more quickly and easily, taking you through the supplier self-service portals, simple forms and logic-based approvals platform used by industry leaders to manage their supplier master data.